The textile industry in Gujarat continues to face significant challenges as it grapples with low demand and high cotton prices. Amid the new cotton season, textile units need help to operate at total capacity, with spinning mills running at only 70% capacity and ginning units operating at a meagre 40%.
The main factor hampering the industry’s export business is the high cost of Indian cotton in the international market. Jayesh Patel, the senior vice-president of the Spinners’ Association Gujarat, explains that Indian cotton is not competitive due to its unfavourable pricing compared to other countries. The current yarn prices are around Rs 230 per kg, with spinning units facing a price disparity of Rs 5-10 per kg.
Unseasonal rains in some states have further disrupted the situation by causing a low arrival of raw cotton and affecting the cotton’s quality.
Apurv Shah, the secretary of the Gujarat Chamber of Commerce and Industry (GCCI), notes that the state’s 900 ginning units are running at only 33% of their capacity, resulting in a loss of around Rs 1,000-1,500 per bale.
Furthermore, cotton prices are hovering around Rs 55,000 per candy, and experts predict that prices will remain in that range due to higher minimum support prices (MSP) and low cotton arrivals. Last year, farmers refrained from selling their cotton at a lower rate, and this year, the appearance of cotton still needs to be higher.
If the demand does not improve soon, the textile sector, particularly ginning and spinning units, may face enormous challenges for the second consecutive year. Gujarat, which heavily relies on imported cotton from Maharashtra, could increasingly need help to sustain its spinning activities.
